KEMSA Board Position Statement on Reforms agenda and commitment to integrity

The attention of the Kenya Medical Supplies Authority (KEMSA) Board has been drawn to several recent media reports. It is instructive to note that KEMSA is a strategic State Corporation mandated to undertake roles and responsibilities to ensure supply chain excellence for Health Products and Technologies (HPTs). Therefore in the interest of facilitating public information, the Board wishes to place some of the reports in context by explaining the following points:

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1. The Board acknowledges the release of the Global Fund Grants in the Republic of Kenya Audit Report. We note that the report covering January 2018 to April 2021 audit period articulates the Board’s position and assessment of the Authority’s operating soundness as publicly declared last November. Media reports alluding and alleging that KEMSA has faced fresh integrity challenges are therefore untrue. The Board remains steadfast in providing much-needed oversight and continues to work closely with key partners. Indeed, the audit report confirms that The Global Fund and partners have invested in resilient and sustainable systems for health in Kenya, including strengthening the national procurement and supply chain system.
2.  January 2018 to April 2021 audit period report further acknowledges ongoing reforms and a message from the Global Fund Executive Director confirms that: “KEMSA’s reform program continues to make progress. A KEMSA strategic team was recently established to steer the reform agenda toward concrete implementation, and priorities have been established and cascaded down through KEMSA’s structure. While protracted procurement processes and ongoing weaknesses in monitoring and oversight pose challenges for the achievement of programmatic objectives, improvements have already been realized in achieving timely delivery, reinforcing IT infrastructure, and enhancing coordination with the Ministry of Health disease programs. The Global Fund continues to maintain regular oversight of Global Fund-financed procurements and is supporting Principal Recipients, the Ministry of Health, and KEMSA in pursuing opportunities for improved controls, increased efficiencies, and strong collaboration at all levels – from health facilities to counties and the national level.”
3. On November 4, 2021, the Board confirmed that organizational reform efforts; had been stepped up to position the Authority as an effective player in the local healthcare system. This was in the realization that KEMSA was grossly underperforming and largely unable to meet its clients’ urgent needs, particularly the delivery of essential Medicines and Products to the Counties, Referral Hospitals, and Programs. This state of affairs had endangered the lives of Kenyans and gravely threatened the realization of Universal Health Coverage (UHC), which is critically predicated on a successful and optimally operating KEMSA.
4. Just like the Board reported last year, the Global Fund 2018-2021 report acknowledges that an audit of the Kenya portfolio had found that the Kenya Medical Supplies Authority’s (KEMSA) warehousing and distribution systems were affecting traceability and accountability of commodities received and distributed. The audit showed that significant improvement is needed in internal controls and assurance over the procurement and supply chain. It also found that improvement is needed in financial management and controls for better accountability, and better absorption and utilization of investments such as the C19RM funds. Further, the message from the Global Fund Executive Director indicates that the Fund is committed to working with the government of Kenya and partners to address the key issues and risks identified under the audit.
5. Contextually, the reforms at the Authority are part of far-reaching recommendations outlined in several KEMSA restructuring reports, including the latest KEMSA Immediate Action Plan and Medium Term Reforms Working Committee (KIAPRWC) report. Commissioned by the Board, the KIAPRWC report revealed challenges in critical functions. Some of these critical challenges identified by the Board last year and collaborated in the Global Fund Audit Report are divided into four buckets:
6. a)Financial Crisis- Lack of Financial Controls and Structures to optimize the collection of outstanding debts.
7. b)Supply chain Crisis- leading to a low Order Fill Rate and a High order Turn Around Time (OTAT)
8. c)Warehousing and Distribution Chaos- Dead Stock, Purchase of non-priority items, Poor contracting during distribution
9. d)Procurement chaos- Long procurement Lead Times leading to stock-outs
10. Conscious of these challenges, the Board which was appointed vide a Gazette Notice on 28th April 2021 and inaugurated early May 2021, embarked on developing a KEMSA Transformation Strategy. The strategy is anchored on a reform foundation and plans to facilitate global best practices. These best practices include a good span of control, transparent reporting relationships and command structures, compounding related functions for strengthened accountability, and a re-determination of optimal staffing levels and norms.
11. To ensure accountability, the Board has in the past ten months embraced information technology systems and is actively pursuing the end-to-end integration and rolled out the award-winning KEMSA Electronic Proof of Deliveries or e-POD App, that keeps track of deliveries to primary health facilities.
12. The board has also stepped up stakeholder engagements this year while seeking further resources to underwrite the ongoing reforms. We wish to confirm that commendable progress has already been made, and the reform agenda is firmly on course. We take pride that jointly with the Management teams, we have laid a solid foundation for reforms by creating a shared vision, establishing project teams, and training staff to adopt structured problem-solving approaches.
13. Within the last six months, critical reforms have been achieved and the board evaluation matrix confirms that we have achieved a 65% progress rate against the targets set to be achieved by mid this year. In support of UHC, KEMSA in the last financial year procured Health Products and Technologies (HPTs) worth KShs. 35.84 billion, and distributed to more than 11,500 health facilities.

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Working in close collaboration with the Ministry of Health, Development Partners for Health in Kenya (DPH-K), and other stakeholders, the Board reiterates its commitment to facilitate reforms at KEMSA to deliver quality and affordable HPTs. We reiterate that within our term, KEMSA has not faced any new integrity attack to the best of our knowledge and commend the dedicated staffing teams working hard to uphold the authority’s operating mandate, guided by the tenets of our national values.